Investment banks reject “ridiculous” 30 percent pay raises
Investment bankers in Hong Kong, licking their wounds after receiving poor bonuses, are demanding massive pay increases when they jump ship.
Despite a downbeat job market, front-office candidates are as aggressive as ever during pay negotiations, according to 13 senior human resources professionals from large, mainly global, financial institutions who attended a recent eFinancialCareers round table in Hong Kong.
“So far this year, a lot of the experienced fee earners who are applying to us in Hong Kong are asking for ridiculous upticks in base salary of around 30 percent – more than in past years,” said a representative of a major US investment bank in Hong Kong.
“They want to make up for the fact that bonuses are down this year at most of our rivals, and they want a high risk premium for changing companies,” she added.
A 30 percent increase could amount to US$62k or more. Base salaries in corporate finance in Hong Kong for professionals with eight or more years' experience start at HK$1.6m (US$206k), according to a 2013 salary survey from recruiters Robert Walters.
The round-table delegates, who were based in Hong Kong and asked not to be named, agreed that tight internal budgets and an abundance of candidates to choose from meant they could reject nearly all hefty pay hikes. “We stress the whole employment package to people we interview, total compensation and benefits, not just base salary,” said an human resources person from another US bank.
Highlighting employee benefits – such as medical cover, work-life balance, holiday leave, and support for working parents – to potential new recruits was a comparatively cheap and increasingly important way to encourage them to join, round-table attendees agreed. “We are seen as a firm that doesn’t pay that well, especially compared with the American banks,” said a representative from a European bank in Hong Kong. “So we are reviewing our benefits because that’s one area where we can really stand out,” he said.
His counterpart at an Asia-Pacific bank added: “These days, every time I interview people, they ask me to show them our medical-insurance booklet. That never used to happen.”
A recent spate of banking redundancies in Asia means candidates are also increasingly worried about whether new roles are secure in the long term. Morgan Stanley, Credit Suisse, Bank of America Merrill Lynch, UBS and HSBC are among the firms who have cut people in late 2012 and early 2013.
“Candidates are asking much more in-depth questions during job interviews compared with just six months ago,” said a round-table delegate from an Asian bank. “They want to dig deep into how committed we are to the business area; what our strategy is for the future.”